Introduction of New Currencies (in progress)


1993: Czech Republic and Slovakia, ?????, Czech and Slovak koruna

  • Dissolution of Czechoslovakia into the Czech Republic and Slovakia
  • Pavel Kysilka handles the currency on the Czech side
  • At first planned to maintain one common currency, but a dangerous outflow of cash from Slovakia into Czech republic led leaders to enter talks about splitting currency
  • As an interim solution, old Czechoslovak notes were stamped to identify them as either new Czech koruna or new Slovak koruna
  • Stamps were printed in secret in Latin America, flown to storage in the safe of Czech National Bank, and then stamped with helped from the Army, the police, to a total of 40,000 people working over 4 days
  • Later in the year, the countries printed their new notes independently
  • “The scenario is simple in principle, but it is very difficult not to botch it. If you give it to professionals, they won’t,” Kysilka said. “But if you give it to politicians, they will.”

2003: Iraq, De La Rue, new dinar

  • to replace the ones with Saddam Hussein on them, as well as alleviate the short supply of banknotes that was a big problem for Iraq at the time
  • supposedly a “substantially bigger” order than the usual 300m to 400m banknotes
  • De La Rue won the contract from the United States, who brought in the new currency as part of a multibillion dollar rebuilding program
  • took about four months, Mark Crickett (DLAR spokesman) called it the “fastest he could think of”

2011: South Sudan, De La Rue, South Sudanese pound

  • six months to design and manufacture this brand-new currency
  • Sudan split in two, with Republic of South Sudan gaining independence after Africa’s longest-running civil war
  • the contract caused De La Rue’s first-quarter profits to rise 22% (after they fell by 68% the year before due to the Reserve Bank of India problems)
  • CEO Cobbold: “Regime change has the potential to create opportunities for De La Rue. Generally change in that sort of way offers potential to De La Rue and we follow these sorts of things closely.”

2012: Greece? De La Rue or G&D? drachma?

  • DLAR Dir. of Marketing says the process takes several months: “You have to consider the preparation of special banknote paper incorporating security features; the design of the notes; the process of bringing these elements together and then printing. It simply couldn’t be done overnight.”
  • DLAR CEO Cobbold: “We have people in every region in the world. We are very close to all geopolitical conditions that develop.”
  • Cobbold gives a potential timeline of 6 months

_________________________________________________________

Rigby, Jennifer. “Lessons for Greece from Czech-Slovak split.” 13 June 2012.

Moore, James. “Iraq windfall gives lift to De La Rue.” 20 September 2003.

Preparing for EurogeddonBBC Radio 4. 20 May 2012.

Sibun, Jonathan. “Birth of South Sudan Helps Put De La Rue Back on Track.” The Telegraph.22 November 2011.

De La Rue Profit Lifted By South Sudan Deal.Reuters. 22 November 2011.

Bawden, Tom. “South Sudan Boosts De La Rue Profits.” The Independent. 23 November 2011.

Stevens, Susannah. “Who, What, Why: How would Greece Switch Currencies?” BBC News. 11 June 2012.

Wallop, Harry. “De La Rue silent on deal to print Drachma.” The Telegraph. 29 May 2012.

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Comments
2 Responses to “Introduction of New Currencies (in progress)”
  1. dem says:

    With the breakup of Czechoslovakia and the temporary currency solution, wasn’t there also an issue with the Czech koruna having a much higher value than the Slovak koruna, and so Slovaks (and people in general) would peel off, or otherwise alter, the stamp so their currency would become Czech instead?

    I read this somewhere, but it then sounded like they only stamped the Slovak korunas, the Czech currency remained the same, hence the ease with which they were able to make the change (all they had to do was peel off the Slovak stamp…)

    • catemccrea says:

      Yes – there was some sort of stamp to distinguish and then lots of fraudulent stamp-transfer going on. I think we got conflicting information as to what exactly the stamp setup was, because a BBC story I found implied that there was one stamp that got switched around. The Prague Post article cited above, though, is basically an interview with the guy who handled the transfer on the Czech side — so I am inclined to believe that article when it says
      “To save time, old Czechoslovak notes were stamped with either Czech or Slovak identification to mark them as the separate currencies.”

      This kind of intrigue will definitely make it into this post at some point, as will info from this Planet Money podcast:
      http://www.npr.org/blogs/money/2012/06/01/154153186/how-to-kill-a-currency
      which is, fascinatingly, the same story about 50 years earlier — the breakup of the Austro-Hungarian empire and the accompanying explosiion of new currencies. Definitely worth a listen.

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